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Abstract

The study assessed the relationship between leadership and growth of SMEs in Uganda using the case of Masaka Municipal Market (MMM).It sought to establish the leadership forms that were employed by leaders in SMEs in the market, determine the growth trends in these SMEs, and examine how the two variables interacted. The study employed both a descriptive and a correlational research design. Both quantitative and qualitative approaches were used to collect data. A total of 405 respondents participated in the study and included leaders and top management of 123 SMEs in Masaka municipal market. The study findings revealed that there is a positive relationship between directive, coaching and supportive leadership styles, and growth of SMEs. It was also revealed that delegating leadership had a negative relationship with growth of SMEs. It was concluded that a mix of directive, coaching and supportive leadership led to better growth results in SMEs. Delegating leadership limits growth in SMEs. It was recommended that leadership training for leaders in SMEs was important to develop a mix of leadership skills and competencies. Employee skills development is also necessary to enable them react better to different forms of leadership.
International Journal of Academic and Applied Research (IJAAR)
ISSN: 2643-9603
Vol. 6 Issue 4, April - 2022, Pages:60-84
www.ijeais.org/ijaar 60
Leadership Practices and Growth of Small and Medium
Enterprises (SMEs) in Uganda, a Case of Masaka Municipal
Market
Twesigye Nduhura1, Muhammad Masembe 2 Teddy Akakikunda 3 Ritah Nansamba 4
Correspondence:
Twesigye Nduhura, Department Business Management, College of Economics and Management Sciences, Kampala International
University,
Email: twesigye.nduhura@kiu.ac.ug , Tel . No :+256786388199
2 Muhammad Masembe , Directorate of Human Resource Management, Kampala International University
3 Teddy Akakikunda - Department Business Management, College of Economics and Management Sciences, Kampala
International University
4 Ritah Nansamba - Department Business Management, College of Economics and Management Sciences, Kampala International
University
Abstract: The study assessed the relationship between leadership and growth of SMEs in Uganda using the case of Masaka
Municipal Market (MMM).It sought to establish the leadership forms that were employed by leaders in SMEs in the market,
determine the growth trends in these SMEs, and examine how the two variables interacted. The study employed both a descriptive
and a correlational research design. Both quantitative and qualitative approaches were used to collect data. A total of 405
respondents participated in the study and included leaders and top management of 123 SMEs in Masaka municipal market. The
study findings revealed that there is a positive relationship between directive, coaching and supportive leadership styles, and growth
of SMEs. It was also revealed that delegating leadership had a negative relationship with growth of SMEs. It was concluded that
a mix of directive, coaching and supportive leadership led to better growth results in SMEs. Delegating leadership limits growth in
SMEs. It was recommended that leadership training for leaders in SMEs was important to develop a mix of leadership skills and
competencies. Employee skills development is also necessary to enable them react better to different forms of leadership.
Keywords; Leadership Practices; Growth ; Small and Medium Enterprises (SMEs); Uganda; Masaka Municipal Market
1.1Introduction
This study examined the influence leadership styles and growth of Small and Medium
enterprises in Masaka Municipality, Uganda. The study noted that there are number SMEs which are established annual;
the majority of SMEs in Uganda are short live they do not leave to see they second birth day. It worth noting that, very few of
those small firms can reach the medium size which, eventually, a portion of them have the potential to further develop into large
firms depending on the founders and the entrepreneurs of those firms (Nichter & Goldmark, Small Firm Growth in Developing
Countries, 2009) This study sought to critically examine the leadership styles and its influence in organization performance .
Small scale entrepreneurship is applied by those entrepreneurs who had been able to lead their enterprises into sustained growth.
In this study, Leadership style was conceived to be the independent variable, whereas enterprise growth was the dependent
variable.
Business growth has been an area of study for many researchers (Gupta, Guha, & Krishnaswami, 2013). There are many concepts
of enterprise growth stages. Most of them are derived from a classical model of social systems growth cycle, according to S
curve, in which there are three basic phases: emergence and growth, stability and dynamic balance and change or collapse and
dissolution (Brzezinski & Stefanczyk, 2013). Various theories and models have emerged over the years describing the process
through which an enterprise goes, from idea conception to the final stages. In the 1959 classic theory of the growth of the
firm Penrose described the firm as an administrative organization in the real world, in which the firms existing human
resources provide both an inducement to expand and a limit to the rate of expansion (Garnsey, 1998). (Greiner, 1972) Proposed
five stages of business growth and argued that each stage ends with a set of crises, which must be resolved for the organization
to develop to the next stage. He emphasized that each stage had specific demands that had to be met by the organization.
(Churchill & Lewis, 1987, pp. 4,5,6,7)broke the stages of enterprise growth into five, i.e. existence, survival, success,
take-off, and resource maturity. However, this linear life cycle model of enterprise growth has received criticism from various
scholars, who argue that while broad stages of enterprise development can be indicated, firm development may not necessarily
progress through each stage (Asiimwe, 2015, p. 1). Empirical evidence shows that some firms move from one stage to another,
then stagnate, and subsequently either die off, or progress to another stage. There have also been cases of a firm moving from a
International Journal of Academic and Applied Research (IJAAR)
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Vol. 6 Issue 4, April - 2022, Pages:60-84
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higher stage to a lower stage.
Much as the impact of leadership on success of big businesses has been explored extensively, and there is evidence of a clear
link between the adoption of good leadership practices and performance of these businesses, Leadership in SMEs has not received
the same kind of attention in the past. Researchers have acknowledged that an understanding of leadership behaviors of the leaders
of SMEs is crucial to ensure further development of SMEs (Abu Kassim & Sulaiman,
2010). Whereas most studies about challenges facing SMEs in developing countries have focused on factors such as
business environment, access to finance, availability of technology there is a dearth in research about the concept of leadership
in respect to growth of SMEs in these regions.
(Maina, et al., 2013)noted that in the field of entrepreneurship, particularly within the SMEs sector, the leadership has received
less attention. Perhaps this was because researchers considered SMEs too small to be affected by the concepts of
leadership. However, SMEs represent a unique cluster of organizations normally dominated by founders, with limited
resources and operating in highly volatile and competitive environments. Success and sustainability therefore requires
exceptional effort from role players creating a dire need for extra-ordinary leadership capability.
(Cogliser & Brigham, 2004)mentioned that leadership had started receiving greater attention in the entrepreneurship literature
since it had been recognized that entrepreneurs cannot successfully develop new ventures without the presence of
effective leadership behavior. In recent years, the term entrepreneurship” or entrepreneurial management/ orientation
has become increasingly popular- not the least in the context of small and medium size enterprises (SMEs) (Eriksson & Li, 2012)
Effective leadership is thought to be crucial in the attainment of organizational success and more importantly in the sustainability
and success of SMEs. While research shows that the possession of certain traits alone does not guarantee leadership success,
there is evidence, especially in Western literature, that effective leaders are different from other people in certain key aspects.
2.0 Literature Review
2.1 Leadership practices
According to Hersey and Blanchard, there are four types of leadership which include Directing,
Supporting, Delegating and coaching.
Directing
Directive leadership is defined as the process of providing the subordinates with a guideline for decision making and action that
is in favor with a lea
der
s perspective. It is also commonly perceived as a task oriented behavior, with a strong tendency to
control discussions, dominate interactions, and personally direct task completion (Bell, Chan, & Nel, 2014, p. 4). A directive
leader needs real or perceived position power and an overt or silent threat that creates fear (Pallas, 2012, p. 8).(Stefanovic,
2007, p. 4)explains that the directing leadership style is characterized by setting clear directions and rules. Leaders, using
this style, command, indoctrinate, supervise, and control their workers. Apart from that, these leaders provide necessary
information and training to their workers.
Coaching
(Whitmore, 2002, p. 2)says Coaching is unlocking a persons potential to maximize their own performance. It is helping them to
learn rather than teaching them. He further adds that a leader acts in such a manner that possibilities based on mutual commitment
are created, which enables those being coached to get the best out of themselves. The best business coaches act as a
valuable mirror for their direct reports and help them to better assess what they are doing and what they are doing(Zenger
& Stinnet, 2010, p. 1).For a coach to be able to do his/ her job properly, it is necessary to consider the mental and psychic
characteristics of subordinates and give them a certain direction (abedini, Esmaili, & Tojari, 2014).(Mwai, 2011, p. 7)adds that
the leader explains why, solicits suggestions, praises behaviors that are approximately right and continues to direct task
accomplishment.
Supporting
In supportive leadership, the manager is not as interested in giving orders and managing every detail as in giving employees the
tools they need to work themselves. While delegation is a vital part of supportive leadership, managers do not simply assign
tasks and then receive the results.
Instead, they work through the tasks with employees to improve skills and talent until the manager does not need to worry
about a task being done correctly and the employee is fully empowered in a particular area (Schweikle, 2014, p. 13).(Hocine &
International Journal of Academic and Applied Research (IJAAR)
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Vol. 6 Issue 4, April - 2022, Pages:60-84
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Zhang, 2014, p. 3) explain that Providing supportive autonomy means giving people the room they need to succeed on their own,
but also remaining hands-on enough to provide support when it is needed. Leaders create a positive workplace when they view
their role as coordinating, facilitating, and supporting the work of their people rather than controlling it. Leaders pass day-to-
day decisions, such as task allocation and processes, to the follower. The leader facilitates and takes part in decisions, but control
is with the follower.
Delegating
Leaders are still involved in decisions and problem-solving, but control is with the follower. The follower decides when and how
the leader will be involved. All a leader does when delegating is give their subordinate an assignment, the necessary instructions
in the beginning and possibly a deadline and leave the rest up to them. That leads to the conclusion that the delegating leadership
style is only suitable for use with employees who are highly skilled and highly committed and can be trusted (Schweikle, 2014,
p. 14). The delegating leadership style is characterized by the transfer of authority and responsibilities to the workers and
teams. Leaders, using this style, share projects and tasks with their followers and allow them to complete the tasks independently.
For this style to be successful, leaders need to be familiar with their workers and their education, knowledge, skills, goals, desires,
leadership potentials, etc. In this way, leaders are in a position to delegate projects to the suitable workers. During the delegating
process, leaders communicate the goals, standards, procedures, and authorizations to their followers. Afterwards, leaders
transfer projects to the followers, and the leaders focus on supervision and evaluation of the work. (Stefanovic, 2007, p. 7)
2.2 Business Growth
The word enterprise growth is used to describe a development process of enterprise from small to big and from weak to strong
(Moa, 2009, p. 1). Enterprise growth is a complex adjustment process which is different from the simple scale extension. (Sun
& Huemin, 2004). Explain that it takes the balanced adjustments of various relations in the inside and the outside of the
enterprise as the essential character, and it is the process of balanced development from unbalance to balance, and from
lower balance to higher balance. Therefore, the meaning of enterprise growth is the development process that enterprise keeps
the tendencies of balanced and stable growth of total performance level (including output, sales volume, profit and asset gross)
or keeps realizing the large enhancement of total performance and the stage spanning of development quality and level. (Akin,
2012, p. 1)pointed out that there is no unified theory of small business growth, models and approaches used to explain
small business growth are fragmented and wide ranging. (Kruger & M E, 2004, p. 2)state that quantitative growth can be
characterized by the company size (turnover, added value, volume), the profitability of the company and the value of the
company (shareholder value). It can also be measured in the form of qualitative features like market position, quality of product,
and goodwill of the customers. (Gupta, Guha, & Krishnaswami, 2013, p. 3) suggest that there are many different theories on
identifying the main factors that influence growth of an enterprise, and that they include One set that addressed the influence of
enterprise size and age on growth, and the second set that deals with the influence of variables such as strategy, organization, and
the characteristics of the enterprise's owners on growth of the enterprise
Many researchers have come up with various models of enterprise growth over the years each breaking down the steps taken by
firms from startup to maturity stage. (Greiner, 1972)laid the foundation for enterprise growth models by identifying five
stages through which every enterprise can be identified. These include existence, survival, success, take-off, and resource
maturity. (Churchill & Lewis, 1987)modified this model of enterprise growth by breaking down these steps further. They go
ahead and point out the critical role of the founder in these stages and how it must evolve to suit the current stage of growth
of the enterprise. (Rose, Kumar, & Yen, 2006, p. 5)state that As the founding member of the company, the entrepreneur plays
an important role in the long-term business success of a new venture. The entrepreneurial leader champions the vision of the
company and inspires others such as investors, venture capitalists, bankers, customers and employees to support the vision.
However, at some point in time, the company will continue to grow and the founder must focus and emphasize on different areas
of competencies and talents in order to lead the company to long-term business success.
In this research, the researcher follows the enterprise growth theory basing on the life cycle theory as proposed by (Greiner,
1972). (Coad & Holzl, 2010)summarized the determinants of firm growth into innovation, profitability, and productivity.
Profitability
There is still not a consensus on which came first; the firm growth or the profitability.
According to some theoretical arguments, growth affects profitability and profitability supports growth. (Coban, 2014, p. 1).
In a classical paper on evolutionary theory, (Alchian, 1950) proposes a "natural selection" argument that fitter firms grow
and survive, but less viable firms lose their market share and exit through the evolutionary selection mechanism. Thus, if
profit rates reflect the degree of fitness, it is possible to predict that profitable firms will grow and maximize their profits.(Coad
& Holzl, 2010, p. 7)further propose that selection pressures operate to redistribute market share to the more profitable firms.
Indeed, one would expect that profitable firms have not only the means to finance expansion, but also the motivation to grow,
International Journal of Academic and Applied Research (IJAAR)
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since they can obtain a larger amount of profits from a larger sales base.
Innovation
(Coad, 2014, p. 18)in his review of past literature discovered that scholars have had contrasting conclusions in regards to the
relationship between innovation and firm growth. Some say it has a positive relationship, others no effect at all, and yet others
were still not sure even after their research. (Braunerhjelm, Ding, & Thulin, 2016, p. 21)assert that there is a strong positive
relationship between innovation and firm growth.(Lockett, Hayton , Ucbasaran, Mole , & Hodgkinson, 2013, p. 12)assert
that Innovation and new product development is central where the desired growth involves new products and services, whether
in existing, or new markets. Successful new product innovation is associated with organizational growth in both sales and
employment and also supports internationalization.
Productivity
(Pozzi & Schivardi, 2015, p. 1)note that Modern theories of industry dynamics assume that firms are heterogeneous along a
single unobserved dimension, productivity, which determines the firms performance and growth. (Coad & Holzl, 2010)
Contend that there are models of evolutionary flavor that essentially posit that an economys productive resources are reallocated
from less productive to more productive firms.
2.3 Leadership style and Business growth
For SMEs to grow requires owners and employees to engage in both leadership behaviors and management practices.
Leadership is associated with taking an organization into the future, through the identification and exploitation of opportunities;
requiring vision to produce useful change (Lockett, Hayton , Ucbasaran, Mole , & Hodgkinson, 2013, p. 6). They further
explain that leaders in SMEs may have greater discretion than those in established organizations, and thus their leadership is
likely to have greater impact on firm behaviors and outcomes. According to (Henman, 2016, p. 6), Leadership style, more than
leadership traits, determines leader effectiveness. Different leadership styles may affect organizational effectiveness or
performance (Nanjundeswaraswamy & Swamy, 2014, p. 1). Style is related to one's model of organizational behavior. The
leader's style or manner of dealing with the organization's members and communicating with them contributes to or detracts from
the group's overall functioning.
(Ensley, Hmieleski, & Pearce, 2006, p. 4) Identify directive leadership behaviors as being important forms of vertical
leadership within new ventures. This view stems from the need for clear goals and reward contingencies to be set during the
initial stages of the new venture creation process.(Chartered Institute of Personnel Development, 2014, p. 10)adds that as the
organization grows further, some of the negative sides of the traditional topdown leadership (directive) begin to emerge. For
example, strong topdown hierarchy can hinder empowerment at the front line, particularly if the leader is attempting to control
day-to-day operations without sufficient contact with the business, as their time is consumed by managing strategic direction
and external relationships. (Bayers, 2011, p. 15) Opines that the delegating leader will do well in workplaces where all workers
are very specialized in their task, most likely a highly-educated work force, such as a consultancy firm, a brokerage, or a team
of IT specialists. In a review of literature, (Bruggemann, 2014, p. 6) found that the supportive leadership style is linked to
affective outcomes, because socio-emotional support increases positive affect and pleasure in the workplace.
(Chartered Institute of Personnel Development, 2014, p. 26)highlighted that When managers and teams are gaining skills to lead
on the organizational agenda, the role of their senior leader is to provide a sense of direction and coach them through delivery,
rather than impose a new way of working in a topdown manner.(Zenger & Stinnet, 2010, p. 2) argues that Organizations need
to become more inspiring and more human in order to meet the needs of the people who populate them today and Coaching is
one of the best ways to achieve this, creating greater interaction between leaders and direct reports, and thereby aligning goals
and progress.
Institutional Culture
The application of a leadership style cannot be an imposition but needs to consider the diversity of cultures in order to be
effective (Vailati, 2014, p. 10).(Ozdemir, 2010, p. 10)agrees with this
position and adds that although we live in a globalized economy in which everything is standardized, it is unlikely to find a
generalization of the way culture influences leadership perception and execution.(Sharma & Sharma, 2010, p. 1)assert that
leadership and organizational culture are strongly intertwined and share a symbiotic relationship.(Nikcevic, 2016, p. 1) defined
Organizational culture as a system of assumptions, values, norms and attitudes manifested through symbols, developed
and adopted by members of an organization through their shared experience which helps them to determine the meaning of
their surrounding environment and how to behave in the same.(Knowledge at Warton, 2017) notes that there are
culturally-
contingent attributes that can help or hinder leadership. What is seen as a strength in one culture may be a considerable
International Journal of Academic and Applied Research (IJAAR)
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impediment in another culture.(Sharma & Sharma, 2010, p. 2)adds that employees and their organizations have a culture that
dictates what to value and what priority to establish. It has been suggested that leadership style must be adjusted according to
the situation to ensure organizational effectiveness.
2.4Empirical Studies
Recent research in the UK highlighted that 41% of high-growth firms found deficiencies in management and leadership
competencies to be an obstacle to business growthand Similarly, only 57% of SME employers in a Small Business Survey felt
that they had strong people management skills; training had been supplied to managers in only 32% of the responding
SMEs. (Chartered Institute of Personnel Development, 2014, p. 3). (Hayton, 2015, p. 8)found that variations in leadership
and management skills are associated with variations in SME performance; both directly and indirectly through an increased
propensity to adopt management best practices. Although interest in the field of leadership among SMEs has grown.(Hashim,
Ahmad, & Zakaria, 2012)in their study on leadership styles in SMEs in Malaysia found that there was no single best style
to follow and that leaders adopted different styles depending on the circumstances. However, they came to this conclusion after
only investigating SMEs in the manufacturing sector, therefore their research cannot account for leadership in all sectors of the
economy.(Maina, et al., 2013, p. 8)note that knowledge of how SMEs in East Africa, especially the successful ones, are led is
very scarce and largely undocumented
A review of the literature indicates that there has not been much interest by scholars in the field of leadership among SMEs,
especially in the context of Uganda. (Mwangi, et al., 2013, p. 41)did a content analysis of data collected from both Uganda and
Kenya, and found that leaders ability to influence their subordinates in SMEs was of high significance to growth of their
organizations. Their research however does not go ahead to describe exactly how the leadership styles may influence firm growth.
3.0 Methodology
This research set out to identify leadership practices, businessgrowth trends and the relationship between the two phenomena
among SMEs. The researcher adopted the mixed methods approach.(Creswell, 2013, p. 32) explains that mixed method is used
when there is need to explain the quantitative results in order to generate a complete understanding of a phenomenon.
3.1 Research Design
The study employedboth a descriptive research design and a bivariatecorrelational research design. The descriptive research
design was used to identify leadership styles and growth trends among SMEs. The correlational research design was used to
determine the relationship between leadership style and growth of SMEs.(Simon & Goes, 2017)explain that bivariate
correlational studies measure the relationship between two variables. Through statistical analysis, the relationship is given a
degree and a direction. The degree of relationship determines how closely the variables are related. The degree of relationship
determines how closely the variables are related. This is usually expressed as a number between -1 and +1, and is known as the
correlation coefficient. A zero correlation indicates no relationship. As the correlation coefficient moves toward either -1 or +1,
the relationship gets stronger until there is a perfect correlation at the end points.(Curtis, Comiskey, & Dempsy, 2014, p. 4)add
that correlational research design can be used in any research study that does not wish (or is unable) to manipulate the
independent
variable(s) under investigation. This research design was therefore appropriate in enabling the researcher to investigate the
relationship between leadership style and growth of SMEs.
3.2 Study Population
The study was conducted in SMEs of Masaka municipal market located in Masaka municipality,MasakaDistrict
which is also is located in the central region of Uganda 125
kilometers from Kampala, the capital city of Uganda. It was chosen because it is within reach by the researcher. Singleton
(1993) advises that the ideal setting for any study should be easily accessible to the researcher and should be that which
permits instant rapport with informants.
These SMEs fit the definition that has been adopted for this research for a small and medium enterprise i.e. Small enterprises
are enterprises that employ between 5-49 employees and have net assets not exceeding Uganda Shillings 360 million,
whereas medium enterprises are those that employ 50-100 people with net assets exceeding 360 million.
3.3 Sample size determination and selection
The researcher administeredquestionnaires to the head of the organization plus 3 other senior
International Journal of Academic and Applied Research (IJAAR)
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Vol. 6 Issue 4, April - 2022, Pages:60-84
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staff members. The researcher believed these were in frequent contact with the business leader and therefore should be able
to best describe the leadership.
The sample size was determined using the formula proposed by (Krejcie & Morgan, 1970)
s= X2NP(1-P)/ (d2(N-1)+X2P(1-P)) Where s is the
required sample size,
X2 is the table value of the Chi-square for 1 degree of freedom at the required confidence level
N is the population size,
P is the population proportion.
Table 1: Sample
s
ize
No.
Category of
respondents
(N)
(S)
Sampling technique
1
Leaders
175
123
purposive sampling
2
subordinates
525
369
purposive sampling
Total
700
492
Key:N Population Size, S Recommended Sample Population (Krejcie& Morgan, 1970).
A sample size of 123 SMEs wasinvestigated as provided by the Krejcie and Morgan tables
3.5 Sampling Techniques
The researcher usedpurposive sampling to select the sample enterprises. (Barreiro & Albandoz, 2001, p. 4)describe Purposive
sampling as the type of sampling where the person who selects the sample tries to make the sample representative, depending
on his opinion or purpose, thus making the representation subjective. Using this type of sampling, the researcher selected
SMEs at different stages of growth in order to capture opinions from a variety of Firms
3.6. Validity and Reliability of Instruments
Validity
Validity is often defined as the extent to which an instrument measures what it purports to measure.Validity requires
that an instrument is reliable (Kimberlin & Winterstein, 2008, p. 2278). In other words, validity is the degree to which
results obtained from the analysis of the data actually represents the phenomena under study. The researcher got assistance
from two experts to help him improve the content validity of the instrument.
Content validity ratio was used to calculate the Content Validity Index, using the formula below:
CVI = Total Number of items rated by all respondents (37 items)
Total Number of items in the Instrument (45 ite
ms)
CVI=37/45
CVI = 0.822
Piloting
Piloting is testing the instruments by trying them in the field. The pre-testing serves to check the questionnaire structure, sequence,
meaning and ambiguity of questions. The pilot process apart from assisting in highlighting potential problems of the research
instrument also serves to test reliability, validity, and appropriateness of the instrument (Asiimwe, 2015, p. 110). To enhance
validity and reliability of the instrument, a pilot study was conducted in two SMEs from Masaka. These enterprises did not
participate in the actual study. The purpose of pre-testing was to assess the clarity of the questionnaire and interview items. Those
items found to be inadequate or vague were modified to improve the quality of the research instruments thus increasing its validity
and reliability.
Reliability
International Journal of Academic and Applied Research (IJAAR)
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Supportive leadership
7
0.77
Delegating leadership
5
0.83
Enterprise growth
8
0.76
Institutional culture
6
0.80
Overall
61
0.80
Reliability is the consistency of a measurement or the degree to which an instrument measures the same way each time it is
used under the same conditions with the same subjects. It is the repeatability of a measurement. Reliability is concerned with
accuracy of the actual measuring instrument or procedure (Mugenda and Mugenda, 1999). The researcher used the split-half
technique of assessing reliability where an instrument was designed in such a way that there were two parts. Subject scores
from one part were correlated with scores from the second part to eliminate chance error. This was done using Cronbachs alpha.
If R2 (Alpha) value equaled to 0.7 and above, then the instrument was considered satisfactory (Cronbach, 1951)After the data
collection, reliability analysis was done and the findings for each of the variables are presented in Table below.
Table 2: Reliability of Statistics
Variable
No. of Items
Alpha
Directive leadership
7
0.74
Coaching leadership
7
0.89
From Table 2 above, the overall reliability coefficient of the questionnaire was 0.80.Coaching leadership had the most reliable
items but, generally, all the items in the questionnaire were reliable. This implies that the instrument was reliable for use in
data collection.
3.7Data analysis
Quantitative Data Analysis
Quantitative data was analyzed using Pearsons Coefficient of Rank Correlation. The statistics used include frequency counts,
percentages, mean, standard deviation, Pearson product moment correlation and Chi-square test. Data analysis required the use
of a computer spreadsheet, and for this reason the Statistical Package for Social Sciences (SPSS) was used. (Arkkelin,
2014)
M
e
n
ti
ons
that SPSS is widely popular within both Academic and Business circles, and it is the most used package of its type.
He further says that it is a versatile software that allows many different types of analyses, data transformations, and forms of
out-put. The results of
da
ta a
n
al
ys
i
s
are presented using frequency distribution tables and charts
Qualitative Data Analysis
The researcher analyzed Qualitative data usingboth content analysis and thematic analysis. Content analysis involved
coding the data and later processing it. This is because the two approaches complement each other since, the theme
emerges from the description summaries from the responses.
4.1 Study Findings
The study examined leadership styles and how they influence growth of Small and Medium Enterprises. This chapter
presents and discusses the findings of the study. This presents an analysis and interpretation of results.
4.1.1Response rate
A total of 492 questionnaires were distributed and 405 were returned fully completed. This
gave
a response rate of 82.3%. the
researcher carried out 12 interviews and six focus group discussions. respondents as portrayed in the sample size table in chapter
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3.
4.1.2 Background of Respondents
Table 3: Background of Respondents
Characteristics
Category
Frequency
Percentage
1. Level of Education
Bachelors
201
52.8%
Masters
84
22%
Diploma
63
16.5%
Certificate
24
6.6%
Others
9
2.0%
PHD
4
1%
2. Work Experience
1-4 years
177
47.6%
5-9 years
96
25.8%
10-14 years
45
12.1%
15-19 years
36
9.7%
Over 20 years
18
4.8%
3. Age
20-30 years
213
56.7%
31-40 years
105
28.9%
31-40 years 41-50
years
45
12.4%
41-50 years Above
50 years
8
2%
Less than 20 years
1
0.2%
Respondents by gender
Majority of respondents were male(64.3%) compared to (35.7%) female respondents. This shows that top positions in SMEs in
MMM are mainly occupied by men. Therefore, there is need to train and skill more women to occupy leadership positions in
small and Medium Enterprises. Encouraging women to participate in business will help the nation tap into a wider talent
pool and therefore improve chances of faster economic development.
Respondents according to age
56.7% of respondents were between the age of 20-30 years, 28.9% were between 31-40 years old, 12.4% were between 41-
50 years old, 2% of the respondents were over 50 years old. The majority of the respondents were within the 20-30years age
group, which comprises of the young and vibrant members of society. They were more critical of the leadership in their
organizations because they had many expectations. These are people who can greatly benefit from proper leadership. This age
bracket has the energy to produce stunning results if it is able to receive the right kind of leadership.
Respondents by their level of education
22% of the respondents were Masters degree holders, 52.8% had bachelors degrees, 16.5% were diploma holders, 6.6%
were certificate holders and 2.4% had other qualifications. These results indicate that majority of the respondents had a good
education. Well-educated people have a lot of potential that requires leadership to point them in the right direction. With the
right leadership style, there is no telling what limits SMEs can reach
Respondents by their work experience
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The results show that the biggest proportion (47.6%) of the study respondents had worked for a period of between 1-4 years,
followed by those who had worked for a period between 5-9 years (25.8%). 12.1% had worked for 10-14 years while 9.7% had
worked for 15-19 years. Only 4.8% of the respondents had worked for more than 20 years. This shows that majority of
the respondents were inexperienced. This also means that there is a lot that these individuals cannot do on their own. Therefore,
there is need for proper leadership in-order to develop capacity of subordinates.
4.2Empirical Study Findings
The findings below are presented on the basis of study objectives and questions , the descriptive statistics were presented
before testing hypotheses. The descriptive statistics used were frequencies and percentages, while the inferential statistics used
were Pearson correlation and coefficient of determination.
4.2.1 Research Question one: Are there various leadership practices used among SMEs in Uganda?
The first objective of the study was to identify the leadership styles among SMEs in Uganda.
The respondents were requested to answer a number of statements regarding the leadership style in their firms by indicating
their agreement using a five-point Likert scale of SD=Strongly Disagree, D=Disagree, N Neither Agree nor Disagree,
A=Agree and SA = Strongly Agree as shown. The responses are summarized in the table below;
Summary statistics on leadership styles in SMEs in Masaka Municipal Market. Table 4: Results for
Directive Leadership
QUESTIONS
RESPONSES
FREQUENCY
PERCENT
M
STD
DEV
Communication only comes
from the leader to subordinates
SD
87
21.6
3.09
1.525
D
87
21.6
N
33
8.2
A
93
23.1
SA
102
25.2
Our leader makes all the
decisions
S D
80
19.8
3.24
1.61
D
95
23.5
N
20
4.9
A
68
16.8
SA
121
29.9
We do not question our leader's
instructions
SD
75
18.5
3.7
1.407
D
80
32.4
N
34
8.4
Agree
96
23.7
SA
107
26.4
our leader rewards subordinates who
follow his instructions closely
SD
59
14.6
3.58
1.303
D
82
20.3
N
15
3.7
A
163
40.3
SA
70
17.3
our leader punishes
subordinates who do not follow
his instructions
SD
86
21.3
D
70
17.3
N
31
7.7
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A
98
24.2
3.46
1.238
SA
112
27.7
Our leader clearly defines
subordinates' roles
SD
18
4.5
3.89
1.057
D
36
9
N
33
8.2
A
201
50
SA
114
28.4
Our leader closely supervises
subordinates' tasks
SD
15
3.8
3.76
1.061
D
39
9.8
N
75
18.9
A
165
41.7
SA
102
25.8
The details below interrogate the empirical results through advanced statistical tests to demonstrate the views of the
respondents on whether directive leadership was practiced in their enterprises. The details are supported by interview results.
Respondents were asked to state whether communication only came from the leader to subordinates.A mean of 3.09 indicated
that the majority agreed with the statement. This implied that in more than half of the enterprises that were investigated,
communication usually follows a top down approach. In these firms, subordinates wait for instructions from their leaders
before they can act on situations. This finding was affirmed in an interview where a respondent noted that the leader always
gave instructions on what was to be done and this was supposed to be implemented at whatever cost.
When asked whether leaders made all the decisions, an item mean of 3.24 showed that majority of the respondents were in
agreement. Meaning they waited for decisions to be made by the leader before any action was taken. This was further
reinforced when a mean of 3.7 was achieved after respondents were asked whether they did not question their leaders
instructions. An interviewee mentioned that subordinates were afraid to question instructions that came from the leader.
Leaders rewarded subordinates who followed instructions closely (Mean= 3.58) and punished those that did not follow
instructions (Mean=3.46). One interviewee mentioned that failure to follow instructions resulted in the leader barking at the
subordinates.When respondents were asked to state whether their leaders had given clearly defined roles and responsibilities
to the subordinates, a mean of 3.89 indicated that the majority agreed with the item. One respondent reported that clearly defined
roles made performance easier. This implied that in majority of the enterprises that were investigated, leaders assigned clearly
defined roles and responsibilities to subordinates.
The last item required the respondents to respond to whether leaders closely supervised subordinates. Item means of 3.76
indicated that the majority agreed. This implied that majority of the enterprises had leaders who closely supervised their
subordinates.
The combined mean of indicators is 3.531, which shows that directive leadership is commonly used in SMEs.
Table 5: Results for Coaching Leadership
QUESTIONS
RESPO
NSES
FREQUENC Y
PERCENT
MEAN
STD. DEV
Our leader
m
a
kes
sure that we are i
n
support of e
v
e
ry
decision before it is
i
mp
le
m
e
n
te
d
SD
57
14.7
3.22
1.297
D
54
14
N
87
22.5
A
123
31.8
SA
66
17.1
our lea
d
e
r
believes we ca
n
come up with
our
SD
45
11.1
D
61
15.1
N
70
17.3
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own solutions t
o
probl
e
ms
A
102
25.2
3.15
1.077
SA
59
14.6
our leader t
rus
t
s
us to make t
h
e
best judgment
of
s
it
ua
ti
ons
SD
30
7.4
3.71
1.315
D
84
20.7
N
29
7.2
A
137
33.8
SA
90
22.2
our leader does
not punish us for
making mistakes
SD
70
17.3
3.4
1.486
D
56
13.8
N
29
7.2
A
103
25.4
SA
61
15.1
we ta
ke
responsibility
for
what we lea
rn
SD
17
4.2
3.55
1.313
D
43
10.6
N
70
28.4
A
163
40.3
SA
95
23.5
Our lea
der
def
i
nes
boundaries i
n
which we a
r
e
allowed to act
on
our
own
SD
12
3
3.77
1.061
D
51
12.8
N
54
13.5
Agree
180
45.1
SA
102
25.6
Both leader a
nd
subord
i
n
ate
s
participate i
n
d
i
s
c
uss
i
ons
SD
24
6
3.62
1.24
D
72
17.9
N
51
12.7
A
144
35.8
SA
108
26.9
The details below interrogate the empirical results through advanced statistical tests to demonstrate the views of the respondents
on whether coaching leadership was practiced in their enterprises.
Item one required the respondents to state whether their leaders made sure that they were in support of every decision before
it was implemented. Item means of 3.22 indicated that although the majority agreed with the item, a good percentage did not.
This means that in some of the enterprises, leaders did not consider support of a decision by subordinates.
When probed on whether leaders believed that subordinates could come up with their own solutions to problems, a mean of 3.15
signified a slight majority in agreement with the statement. This was further affirmed by a mean of 3.71 when respondents
were asked whether leaders trusted subordinates to make the best judgment of situations.A mean of 3.4 suggested that
majority of the leaders did not punish subordinates when mistakes were made. An interviewer clarified on this statement by
mentioning that instead, the leader would go over the mistake with the subordinate and make sure he learned from it. This way,
the mistake would not be made again. This means that in most SMEs, the leader was relied upon to show subordinates
what needed to be done. When asked about whether subordinates took responsibility for what they learn, an item mean of 3.55
suggested agreement. Leaders defined boundaries in which subordinates were allowed to act on their own (mean= 3.77). This
implied that leaders usually gave room to subordinates to act on their own provided they were within the acceptable limits.
The last item asked whether both leaders and subordinates participated in discussions. A mean of 3.62 suggested that majority
of the respondents were in agreement with this statement. This was supported by one interviewee who mentioned that they
always discussed tasks with leaders to come up with the best ways of executing.
The combined mean of indicators was 3.49, which indicates that coaching leadership is practiced in SMEs in Masaka Municipal
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Market
Table 6: Results for supportive Leadership
QUESTIONS
RESPONSES
FREQUENCY
PERCENT
MEAN
STD. DEV
Our leader
encourages us to
learn new things
SD
76
18.77
3.25
1.102
D
87
21.5
N
21
5.2
A
109
26.9
SA
92
22.7
Our leader exposes us
to new ideas
SD
47
11.6
3.16
1.412
Disagree
89
22
N
60
14.8
A
90
22.2
SA
57
14.1
Our leader
def
i
nes
targets that
we
have to
meet
on
our
own
SD
32
7.9
3.31
1.547
D
71
17.5
N
43
10.6
A
85
21
SA
101
24.9
We discuss
our
challenges with t
h
e
lea
der
SD
29
7.2
3.69
0.998
D
46
11.36
N
20
4.9
A
191
47.2
SA
87
21.5
Our leader i
s
interested in
our
lives
outside
work
SD
69
17
2.8
1.092
D
120
29.6
N
36
8.9
A
61
15.1
SA
45
11.1
We
par
tici
pa
te
with our leader i
n
decision
m
a
k
i
ng
SD
75
18.8
3.02
1.381
D
87
21.8
N
54
13.5
A
120
30.1
SA
63
15.8
The leader plays a
facilitating
ro
le
SD
6
1.5
3.8
0.878
D
30
7.6
N
72
18.3
A
213
54.2
SA
72
18.3
Item one required the respondents to state whether the leader encouraged subordinates to learn
new things. A mean of 3.25 showed that majority of the respondents were in agreement. One respondent mentioned the leader
challenges me every day to learn new skills and be the best version that I can be. When asked whether leaders exposed
subordinates to new ideas, an item mean of 3.16 suggests a slight majority was in agreement. It is not a big majority
because although most leaders were willing to expose their subordinates, they did not always follow through with the programs.
One focus group discussion came to a consensus that leaders usually came up with big plans of how they were going to boost
employee capacity through exposure. When asked whether leaders came up with targets that subordinates had to meet on their
own, a mean of 3.31 suggested that majority of the leaders did. Respondents further reported that they discussed the challenges
they faced with their leaders (mean= 3.69). One interviewee explained that the leader was always willing to listen to her about
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challenges and come up with solutions together. When asked whether leaders were interested in the lives of subordinates outside
work, a mean of 2.8 suggested that this rarely happens. Most of the leaders did not take interest in finding out what was
happening in the lives of their subordinates. One leader stated that I have just realized that I should take more interest in my
subordinates lives to help them cope with issues they may be going through respondents were asked whether both
leaders and subordinates participated in decision making. Item means of 3.02 a 50-50 split of results on this item.In some of
the SMEs, leaders involved subordinates in decision making, whereas sometimes they did not. Interviews revealed that
this was dependent on whether the leader considered the employee competent to do so.
The last item asked respondents whether leaders in their enterprises played a facilitating role. The item mean was 3.8,
indicating that majority of the respondents were in agreement.
The combined mean of indicators was 3.29 which shows that supportive leadership is also practiced in SMEs in
Masaka Municipal market
Table 7: Results for Delegating Leadership
QUESTIONS
RESPONSES
FREQUENCY
PERCENT
MEAN
STD.DEV
Our leader lets us make our
own decisions
SD
107
26.4
2.52
1.051
D
80
19.8
N
29
7.2
A
67
16.5
SA
48
11.9
We are responsible for the
decisions we make
SD
86
21.2
2.01
1.405
D
74
18.3
N
92
22.7
A
61
15.1
SA
31
7.6
our leader does
not
closely supervise
ou
r
act
i
vit
ie
s
SD
122
30.1
2.3
1.768
D
90
22.2
N
23
5.7
A
50
12.4
SA
42
10.4
We do not seek
guidan
ce
from the leader on
how
to
handle
s
it
ua
ti
ons
SD
165
41.7
2.19
1.282
D
99
25
N
45
11.4
A
66
16.7
SA
21
5.3
We define our own tasks
SD
129
32.8
2.09
1.046
D
159
40.5
N
54
13.7
A
42
10.7
SA
9
2.3
The details below demonstrate whether there is delegating leadership in SMEs in Uganda. The
results are supported by qualitative data.
Item one required the respondents to state whether the leader let subordinates make their own decisions. Item mean of 2.52
shows that majority of the respondents disagreed with the statement. Many interviewees reported not being comfortable
with such an arrangement where subordinates had the power to make their own decisions. This shows that in SMEs, leaders
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rarely delegate all decision responsibility. Respondents were also asked whether they were responsible for the decisions that
they made. The mean of responses was 2.01 which indicated disagreement with the statement. In most SMEs, the leader
remained responsible for the decisions that were made.
Item three required the respondents to state whether their leaders did not closely supervise their activities. The item mean was
2.3signifying disagreement with the statement. In the interviews, it was mentioned that leaders usually did not let subordinates
go unsupervised. Respondents were also asked whether they didnt seek guidance from leaders on how to handle situations.
To this, the mean was 2.19. this exposed disagreement with the statement. The last item required respondents to show whether
they defined their own tasks at work. A mean of 2.09 indicated disagreement. Tasks were usually defined by the leader and
implemented by the subordinates.
The combined mean of2.22shows that delegating leadershipwas rarely practiced among SMEs in
Masaka Municipal Market
4.2.2 Research question two: Are Small and Medium Enterprises in Uganda growing? Summary statistics on
Growth in SMEs in Masaka Municipal Market.
Statements in these questions were rated on the 5 point Likert scale ranging from 1 = strongly
disagree, 2 = disagree, 3 = neither agree nor disagree, 4 = agree and 5 = strongly agree.
Table 8: Results for Growth of SMEs
QUESTIONS
RESPONSES
FREQUENCY
PERCENT
MEAN
STD.DEV
We put more effort i
n
our
work
SD
3
0.7
3.94
0.913
D
36
9
N
54
13.4
A
198
49.3
SA
111
27.6
We get more work done
SD
21
5.2
3.52
0.925
D
76
18.8
N
44
10.9
A
97
24
SA
75
18.5
Our company has
mor
e
ou
t
pu
t
SD
17
4.2
3.73
1.214
D
56
13.8
N
30
7.4
A
138
34.1
SA
97
24
Our company
m
a
kes
more
mon
e
y
SD
13
3.2
3.66
1.058
D
47
11.6
N
78
19.3
A
100
24.7
SA
62
15.3
Our company
sp
e
nds
le
ss
SD
58
14.3
2.95
1.337
D
93
23
N
29
7.2
A
70
17.3
SA
29
7.16
Our company produces
SD
21
5.2
3.23
1.011
new ideas
D
53
13.1
N
34
8.4
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A
162
40
SA
95
23.5
Our company has
n
e
w
so
l
ut
i
ons
SD
3
8
3.76
0.923
D
42
10.6
N
84
21.2
A
186
47
SA
81
20.5
Our products a
nd
services keep i
mproving
SD
21
5.3
3.69
1.058
D
27
6.9
N
93
23.7
A
165
42
SA
87
22.1
The details below interrogate the empirical results through advanced statistical tests to demonstrate the views of the
respondents on whether they thought there was growth in their enterprises. The details are supported by interview results.
Item one asked the respondents to state whether they put more effort in their work. A mean of 3.94 signified strong
agreement to the statement. This was supported in most interviews where respondents claimed they were working harder at
their enterprises. When asked whether they actually got more done at work, a mean of 3.52 suggested that most respondents
were getting more accomplishments at work. In the interviews, they reported finishing tasks faster than they had done in the
past. Respondents were also asked whether the company now had more output. To this, most of them were in agreement
(mean=3.73).
Respondents were required to respond to whether the business was making more money. (mean=3.66) showed that respondents
were convinced the business was making more money. In one interview, it was mentioned that in the past, we used not to
make any profits, now we have been consistently making money for a number of years. However, when asked whether the
business now spent less money, a mean of 2.95 signified disagreement. This was explained that as a business develops, the
budgets and costs also increase. When asked whether they thought that the business produced new ideas, responses had a
mean of 3.23, this showed agreement with the statement. tis was supported by a mean of 3.76 when respondents were asked
whether the businesses had new solutions. Lastly, respondents were asked whether the products and services offered by the
business had been improving. A mean of 3.69 showed that there had been improvements in the products and services.
One interviewee explained that their services had been getting better and better with time.
A combined mean of 3.56 indicates growth among SMEs in Masak a Municipal Market
Table 9: Results for Institutional Culture
QUESTIONS
RESPONSES
FREQUENCY
PERCENT
MEAN
STD.DEV
We have clearly
wr
itte
n
policies that
gov
e
rn
behavior at our
f
i
rm
SD
12
3
3.98
1.031
D
33
8.3
N
45
11.3
A
171
42.6
SA
138
34.6
We have
unwr
itte
n
norms at our
workpl
ace
SD
23
5.7
D
45
11.1
N
77
19
A
102
25.2
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SA
67
16.5
3.72
1.892
Leaders uphold t
h
e
s
e
company
norms
SD
27
6.7
3.66
1.097
D
63
15.6
N
40
9.9
A
109
26.9
SA
82
20.3
leaders
oper
ate
according to the
wr
itte
n
po
licie
s
SD
34
8.4
3.92
1.433
D
29
7.2
N
70
17.3
A
131
32.4
SA
82
20.3
we have a certain
company culture
SD
12
3
3.87
1.059
D
42
10.5
N
54
13.5
A
168
42.1
SA
123
30.8
our Company c
u
lt
ur
e
affects how our lea
ders
behaves t
oward
subord
i
n
ate
s
SD
30
7.6
3.63
1.155
D
42
10.7
N
54
13.7
A
183
46.6
SA
84
21.4
The details below interrogate the empirical results through advanced statistical tests to demonstrate the views of the
respondents on whether there was a culture in their enterprise that affected how the leader behaved towards subordinates. The
details are supported by interviews result. Statements in these questions were rated on the 5 point Likert scale ranging from
1 = strongly disagree, 2 = disagree, 3 = neither agree nor disagree, 4 = agree and 5 = strongly agree.
Item one required the respondents to state whether there were clearly written policies that governed behavior at the
enterprise. The item mean of 3.98 signified agreement with the statement. Only 3% strongly disagreed, 8.3% disagreed,
11.3% neither agreed nor disagreed, 42.6% agreed and 34.6% strongly agreed with the statement. This shows that many of
the enterprises had written governing policies in place.
Respondents were also asked whether there were unwritten norms at the enterprises. A mean of 3.72 indicated majority
agreement to the statement. Qualitative data further showed that many SMEs relied a lot on unwritten norms. people just
somehow new how to behave towards each other, and everyone was expected to behave a certain way. When asked whether the
leaders upheld these company norms, the item mean was 3.66 signifying agreement. Furthermore, a mean of 3.92 implied
agreement to the statement that leaders operated according to these company norms. One interviewee mentioned that leaders
were in fact strong proponents of these company norms at their business.
Majority of the respondents agreed that they had developed a certain company culture(mean= 3.87). Lastly, respondents
were asked whether the company culture affected how the leader behaved towards subordinates. Item means of 3.63 suggested
majority of the respondents agreed with this statement. In one discussion, it was highlighted that culture was key to how leaders
behaved. If the leader’s behavior was consistent with the culture of the company, it was bound to yield better response from
subordinates.
4.2.3 Research question three:Is there a relationship between leadership style and growth of Small and Medium
Enterprises in Uganda?
To answer this question, a correlation of leadership styles and enterprise growth was done to find out the relationships.
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Directive
leadership
Enterprise growth
Directive Pearson
leadership Correlation
Sig. (2-tailed)
N
1
.259
**
.000
405
402
Enterprise growth Pearson
Correlation
Sig. (2-tailed)
N
**
1
.000
402
402
Coaching
leadership
Enterprise
growth
Coaching Pearson
leadership Correlation
Sig. (2-tailed)
N
1
.415**
.000
405
402
Enterprise growth Pearson
Correlation
Sig. (2-tailed)
N
**
1
.000
402
402
Directive leadership
Table 10: Correlation of Directive Leadership and SME Growth
Cor
rel
at
i
ons
.259
**. Correlation is significant at the 0.01 level (2-tailed).
The results show that the correlation coefficient is 0.259and its significance level is 0.01. This implied that directive
leadership in SMEsand enterprise growth have a positive relationship. Therefore, the hypothesis that was earlier postulated is
upheld.
Regression was further done to determine the strength of the relationship between directive leadership and enterprise growth.
Results are presented in the table below.
Table 11: Regression Analysis showing relationship between directive leadership and SME
growth
Model Summary
Model
R
R Square
Adjusted R
Square
Std. Error of
the Estimate
1
.259a
.067
.065
.79912
a. Predictors: (Constant), Directive leadership
The coefficient of determination (Adjusted R square) value is 0.065; this implied that directive leadership explained only 6.5%
of enterprise growth. From all the results the hypothesis earlier postulated stated that there is apositive relationship between
directive leadership and enterprise growth is therefore upheld.
Coaching leadership
Table 12: Correlation of Coaching Leadership and SME growth
Correlations
International Journal of Academic and Applied Research (IJAAR)
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Model
R
R Square
Adjusted R
Square
Std. Error of
the Estimate
1
.415a
.173
.170
.75262
.415
**. Correlation is significant at the 0.01 level (2-tailed).
The results show that the correlation coefficient is 0.415 and its significance level 0.01. This
implied that coaching leadership in SMEs and enterprise growth have a positive relationship. Therefore, the hypothesis that
was earlier postulated is upheld.
Regression was further done to determine the strength of the relationship between coaching leadership and enterprise
growth. Results are presented in the table below.
Table 13: Regression Analysis of coaching leadership and SME growth
Model Summary
a. Predictors: (Constant), Coaching leadership
The coefficient of determination (Adjusted R square) value is 0.17; this implied that coaching leadership explained only 17%
of enterprise growth. From all the results the hypothesis earlier postulated stated that there is a positive relationship between
coaching leadership and enterprise growth is therefore upheld.
International Journal of Academic and Applied Research (IJAAR)
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Enterprise
growth
Supportive
leadership
Enterprise growth Pearson
Correlation
Sig. (2-tailed)
N
1
.287**
.000
402
402
Supportive Pearson
leadership Correlation
Sig. (2-tailed)
N
**
1
.000
402
402
Model
R
R Square
Adjusted R
Square
Std. Error of
the Estimate
1
.287a
.082
.080
.79263
Enterprise
growth
Delegating
leadership
Enterprise growth Pearson
Correlation
Sig. (2-tailed)
N
1
-.105*
.035
402
402
Supportive leadership
Table 14: Correlation of Supportive leadership and SME growth
Correlations
.287
**. Correlation is significant at the 0.01 level (2-tailed).
The results show that the correlation coefficient is low at 0.287 and its significance level 0.01. This implied that supportive
leadership in SMEs and enterprise growth have a positive significant relationship. Therefore, the hypothesis that was earlier
postulated is upheld. Regression was further done to determine the strength of the relationship between supportive leadership
and enterprise growth. Results are presented in the table below
Table 15: Regression Analysis of Supportive leadership and SME growth
Model Summary
a. Predictors: (Constant), Supportive leadership
The coefficient of determination (Adjusted R square) value is 0.080; this implied that supportive leadership explained only 8% of
enterprise growth. From all the results the hypothesis earlier postulated stated that there is a positive relationship between
supportive leadership and enterprise growth is therefore upheld.
Delegating leadership
Table 16: Correlation of Delegating leadership and SME growth
Correlations
International Journal of Academic and Applied Research (IJAAR)
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Delegating Pearson
leadership Correlation
Sig. (2-tailed)
N
*
1
.035
402
402
Model
R
R Square
Adjusted R
Square
Std. Error of
the Estimate
1
.105a
.011
.009
.82279
-.105
*. Correlation is significant at the 0.05 level (2-tailed).
The results show that the correlation coefficient is negative at -0.105 and its significance level
0.05. This implied that delegating leadership in SMEs and enterprise growthhave a negative relationship. Therefore, the
hypothesis that was earlier postulated is not upheld.
Regression was further done to determine the strength of the relationship between delegating leadership and enterprise
growth. Results are presented in the table below.
Table 17: Regression Analysis of Delegating Leadership and SME growth
Model Summary
a. Predictors: (Constant), Delegating leadership
The coefficient of determination (Adjusted R square) value is 0.009; this implied that directive
leadership explained only 0.9% of decline in enterprise growth. From all the results the hypothesis earlier postulated stated that
there is a relationship between delegating leadership and enterprise growth is upheld.
5.0Discussion of the findings.
The discussion of the findings according to the respective research objectives were as follows;
5.1 To analyze the leadership styles used among SMEs in Uganda.
The respondents were asked a variety of questions and the findings indicated that there were various leadership styles used
among SMEs in Masaka Municipal Market. The alternative hypothesis earlier postulated was upheld.
Findings revealed that there is a mixture of leadership practices among SMEs with leaders employing bits of all four leadership
practices. Directive leadership and coaching leadership are the most commonly used styles of leadership, followed by supportive
leadership. Delegating leadership is used at a very small extent among SMEs. These findings were to a good extent consistent
with what the researcher expected to find in the research. The results support the claim by (Pallas, 2012, p. 5) that the directive
leadership style is the most commonly used style around the world. She explains that this is because it is easy to learn and requires
the fewest skills. (Hersey & Blanchard, 1988, p. 171)explained that there is no best way to influence people and that the
leadership style chosen by a leader depends on the readiness level of the people he is trying to influence. This explains the
findings of different leadership styles in the same enterprise. The delegating leadership style was found to be uncommon
among the SMEs. Most leaders do not practice this kind of leadership. This is because they think subordinates cannotdo the job
to expectation if left to operate alone. Most leaders have not invested enough in training subordinates to handle tasks on their
own. This is one of the reasons delegating leadership is not commonly practiced.
5.2 To examine the growth trends of SMEs in Uganda.
Respondents were asked questions to show whether there had been growth in their enterprises. The indicators investigated
were; increase in productivity, increase in profitability and increase in innovation. Results showed that most of the SMEs
investigated reported growth over the period, with increase in productivity, profitability and innovation all reported.
The studyconcurred with (Financial Sector Deepening, 2015, p. 37)that reported that majority of SMEs in Uganda reported
increase in profitability and productivity over the past few years.
Some of the respondents revealed that they had experienced growth at different times, depending on the interventions that the
International Journal of Academic and Applied Research (IJAAR)
ISSN: 2643-9603
Vol. 6 Issue 4, April - 2022, Pages:60-84
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leaders had put in place. Some of the interventions had led to reduction in operating costs therefore increasing profitability, some
made workers more productive whereas others increased innovation among employees.
5.3 To explore the relationship between leadership practices and SMEs growth in Uganda.
Findings show that there is a positive significant relationship between leadership practices and growth of SMEs. This is in line
with what the researcher anticipated to find, since leadership is such an important aspect of any SME. This concurs with (Bolden,
2001, p. 4)who suggested that leadership is very central to business success in SMEs.Respondents asserted that directive
leadership is a necessity in that it helps get the job done. Directive leadership entails clearly defining roles so that subordinates
know exactly what is required of them. This makes it easier for them to meet expectations and therefore leads to increase in
productivity and consequently profitability.Directive leadership was reported to be the most effective when it came to crisis
times. In these situations, a leader has to take charge of the situation, clearly defining roles and closely supervising subordinates
to perform to expectations.Although respondents also noted that it leaves a heavy workload on the part of the leader since
they have to spend a lot of time directing tasks hence failing to focus on the bigger picture. It was also noted that
since directive leadership offers little room for subordinates to communicate challenges to leaders, sometimes innovative ideas
are missed and therefore it stifled innovation. Directive leadership was reported to work best on low level, less skilled employees
who only responded to assigned tasks. However, when it came to senior members in the organizations, it was not regarded as the
best style of leadership.
Respondents suggested that coaching leadership contributed to growth of SMEs in a way that it empowered subordinates and
helped them grow in their roles. This was not seen to yield the best growth results in the short term, but it was considered
very effective in ensuring long term growth. This was because it gave time to subordinates to fully understand and appreciate
their roles, therefore they performed better with time. This finding is in line with(Lorinkova, Pearsall,
& Sims, 2012, p. 36)Who investigated the influence of coaching and directive leadership on the performance of newly formed
teams over time and found that although directive leadership improved performance quickly, performance later plateaued, whereas
coaching leadership improved subordinates learning and cognitive coordination that helped them improve over time. This in turn
leads to sustained growth trends. Leaders also use the coaching style to encourage innovation by empowering employees to take
initiative.
Supportive leadership was found to have a positive relationship with enterprise growth. A leader who practiced the supportive
style of leadership was often viewed by subordinates as helpful. This made it possible for employees to perform better because
the leader made it easy. This was through encouragement and sometimes offering help on certain tasks. In cases where the leader
only provided oversight for the activities performed by subordinates, there had been noticeable increase in innovation as
employees had the liberty to come up with impressive ideas. In most cases, leaders shared new ideas with subordinates and
encouraged them to exploit possibilities, which increased innovation in the enterprises. Another form of supportive leadership
was through presence of the leader. Respondents reported that they had to be easily reachable to subordinates in order to make it
easy for them to ask for help. This was through activities such as regularly scheduled meetings. Some respondents reported
that supportive leadership went beyond work-related tasks and leaders had to be there for subordinates even in their lives to
support them during times of need. This was seen as a way of ensuring that productivity was not affected by other external issues.
Although delegating is considered a key factor in leadership, delegating leadership in SMEs was found to have a negative
relationship with enterprise growth. This came as a surprise to the researcher. Not only is it rarely practiced, majority of
respondents also thought delegating leadership negatively affected enterprise growth. This finding is in agreement with (Sim,
Ansari,
& Jantan , 2004, p. 3)and (Bass, 1990) who noted that delegation remains a relatively
unexplored management option despite evidence of its importance to organization effectiveness. This is attributed to the leaders
lack of trust for subordinates to handle tasks autonomously. One factor that led to this was the little emphasis given to employee
training and development. Few of the SMEs investigated had human resource training programs in place.
The positive effect of directive, supportive and coaching leadership on growth of SMEs implies that leaders can choose from a
variety of styles through which they can manage their enterprises. Delegating leadership having a negative relationship with
growth means that leaders should be cautious when employing this style of leadership as there are few situations where it would
be appropriate. Since subordinates are usually not ready for delegation, leaders who tried this style were considered incompetent
and unserious about their roles.
6.0Conclusions
International Journal of Academic and Applied Research (IJAAR)
ISSN: 2643-9603
Vol. 6 Issue 4, April - 2022, Pages:60-84
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6.1 Leadershippractices among SMEs in Uganda
There are various leadership practices used by leaders among SMEs in Uganda. Findings showed that directive, coaching,
supportive and delegating leadership styles were all used to some extent. Directive style is the most commonly used style, followed
by supportive and coaching styles. Delegating leadership style is uncommon among SMEs although sometimes it is used.
6.2 Growth of SMEs in Uganda
SMEs is Uganda experienced significant growth over the period. This was signified by increase in productivity, profitability and
innovation. Qualitative findings revealed that growth was not continuous and that firms experienced both periods of high growth
and periods of little growth. Sometimes enterprises did not grow at all for a certain period only to resume their growth trends
later. Also, the different indictors of growth increased separately. At one point, it was a high increase in profitability whereas the
next would see a jump in the level of innovation within an enterprise.
6.3 Leadership practices and SMEs growth in Uganda.
It was revealed that leadership style influences growth of enterprises in Masaka Municipal Market. Each style affected the
growth indicators differently. Qualitative data revealed that Directive leadership had a bigger impact on both productivity and
profitability, whereas it did not transform to significant increment in the level of innovation. However, coaching and supportive
leadership which empowered employees to be more innovative was reported to have little effect on increasing profitability of the
enterprise. It was concluded that the best style of leadership depended on the situationat hand and what the leader was trying
to achieve at that particular time. The leader had to be mindful of the subordinates readiness. Most employees in SMEs were not
ready to experience delegating leadership and thus regarded it as an unsuitable style of leadership. Many of them considered a
leader weak if he employed the delegating style.
7.0 Recommendations
Leaders should be more deliberate with the style of leadership they employ among the SMEs. It is important that they study the
situation including the ability and readiness of their subordinates so that they can employ the right style of leadership. It is
important that leaders understand the subordinates maturity level and determine how to deal with them accordingly. One
style of leadership may be appealing to one group of subordinates yet it is frowned upon by another.
Flexibility is also important on the part of the leader. He should be able to switch from one style to another depending on the
changing situation. Leaders should therefore invest in mastering the art of the different leadership style so that they are ready to
provide the necessary leadership. In most cases, they will be required to demonstrate a mix of two or more leadership styles.
Leaders should also put more emphasis on training and developing their subordinates before transforming from one style of
leadership to another. Continuous training and appraisal of subordinates makes it possible for employees to appreciate changing
demands from their leaders. Thisin turn makes It easy for the leader to use other styles of leadership.
Government should consider incorporating leadership as a training course in the preparation of the national labor force. Since
SMEs are considered to be a big contributor to national development, it is important that they are availed with a talent pool of
well-trained leaders who can help stimulate the required growth.
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